Outdoor financials: Saucony pumps up Stride Rite's Q1, plus West Marine, Germany's Invista Resins & Fibers sold, Sports Authority, GSI, Sara Lee

Saucony pumps up Stride Rite’s Q1
Stride Rite (NYSE: SRR) had a strong kickoff to the year, reporting first-quarter gains domestically and internationally as a result of its Saucony acquisition.  

First-quarter 2006 sales were $183.4 million, an increase of 22 percent compared to the same period in the prior year. Net income for the first quarter totaled $8.3 million or $0.22 per diluted share, compared to the net income of $8.2 million or $0.22 per diluted share in the first quarter of 2005. Saucony net sales, which include Hind, were $24.6 million for the quarter, with strong sales in technical running product.

“We had a solid start to 2006, building off the acquisition of Saucony,” David Chamberlain, chairman and CEO of Stride Rite, said in a statement. “The addition of Saucony sales to our other brands has provided increased operating leverage. With sound strategies in place and strong management teams, we anticipate a year of meaningful progress and growth.”

He added, “Saucony domestic sales were in line with expectations as we continue to see strength in technical running and international. We feel positive about Saucony growth opportunities in 2007, including originals and children’s product expansion.”

Stride Rite said its international net sales increased 159 percent, mostly due to the addition of Saucony international sales which were especially strong in Europe and Canada. Also contributing to the increase in international sales were higher sales of Tommy Hilfiger in Canada and Latin America, Keds footwear in Canada, and Sperry Top-Sider in Europe and South Africa.

The company said it is on schedule with its integration of the Saucony business. In late March, it moved the Saucony associates into the Lexington, Mass., headquarters and Saucony began shipping from Stride Rite’s Louisville, Ky., warehouse facility.

West Marine reports larger-than-expected Q4 loss
West Marine (Nasdaq:WMAR) posted a bigger loss than analysts expected for the fourth quarter of 2005 — $21.5 million, or $1.01 per share compared with a net loss of $3.4 million, or $0.16 per share, a year ago. The results include an $8.6 million pretax charge related to uncompleted software projects.

Analysts said they expected a loss of $0.69 per share excluding items. Previously, the company said it expected to report a loss of $17.4 million for the quarter, or $0.82 a share. Sales for the quarter rose 5.7 percent to $124.8 million. Same-store sales were up 3.9 percent from the year-ago quarter.

Net loss for the full year was $2.2 million, or $0.10 per share, compared to net income of $25.5 million, or $1.20 per share, for the same period a year ago. Net sales were $692.3 million, compared to net sales of $683.0 million for the same period a year ago. Same-store sales dropped 2.2 percent compared to the previous year.

Results for the year include the fourth-quarter charge from abandoned software projects, a $2.9 million charge in inventory-value reductions, a $2 million charge for discontinuing the use of a trade name, and an $800,000 charge for costs related to replacing a line of credit. All charges are on a pretax basis.

Looking ahead, the company projects sales for 2006 of $740 million to $745 million, and a rise in comparable-store sales between 1.5 percent and 2 percent. The company expects earnings between $0.15 and $0.18 per share.

Germany’s Invista Resins & Fibers sold
An affiliate of Performance Fibers Holdings has signed a letter of intent to buy Invista Resins & Fibers GmbH’s German polyester yarn business, including both commercial and manufacturing operations in Germany. Performance Fibers Holdings is an affiliate of Sun Capital Partners and expects the purchase to be completed in the coming weeks.

Performance Fibers has been busy — this acquisition is its third major expansion in the past year and is a key component of the company’s growth strategy, it said. In August 2005, Performance Fibers acquired the North American business of Diolen Industrial Fibers, a producer of high-tenacity polyester yarns used in a wide variety of technical applications and tire reinforcement. Then in January 2005, it announced a greenfield expansion of its existing manufacturing operations in China, strengthening its position as a supplier of industrial fibers in China.

Sports Authority schedules shareholder meeting to vote on acquisition
The Sports Authority (NYSE: TSA) will convene a special meeting of stockholders on May 2 to vote to approve its acquisition by an investor group led by Leonard Green & Partners. Stockholders at the close of business on March 30 will be eligible to vote at the special meeting, which will be held at Sports Authority’s headquarters at 1050 W. Hampden Avenue, Englewood, CO 80110. Sports Authority anticipates filing its definitive proxy statement with the SEC on March 31.

GSI adopts poison pill plan
GSI Commerce (Nasdaq: GSIC) has adopted a stockholder rights plan, an anti-takeover measure, saying it needs to protect shareholder interests. GSI said the measure isn’t a response to any hostile takeover attempts, and it adopted the plan after consulting with outside advisers.

“Adoption of the rights plan is a pro-active move by the company’s board of directors to protect the rights of GSI Commerce stockholders to obtain the most attractive price for their shares, particularly given the concentrated ownership of the company’s stock,” GSI said in a statement. GSI creates and operates e-commerce websites for retailers

Also known as a poison pill, the plan will be triggered if a person or group acquires 20 percent or more of GSI’s common stock, or launches a tender offer for 20 percent or more.

Sara Lee appoints branded apparel executives
Sara Lee (NYSE: SLE) has named Lee Chaden executive chairman of Sara Lee Branded Apparel, and Richard Noll as CEO of Sara Lee Branded Apparel, effective April 1. Last year, Sara Lee announced its intent to spin off as an independent, publicly held company its Americas/Asia apparel business, Sara Lee Branded Apparel, a move that is expected to be completed between June and September of this year. Once that spin-off is complete, the new company will be known as Hanesbrands Inc. In their new roles, Chaden will concentrate on preparing the enterprise to be spun off as an independent, publicly traded company, including recruiting a board of directors to govern Hanesbrands, while Noll will focus on managing the global business. Sara Lee is the parent of Duofold.

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